What is a fund switching facility in Ulips? How many fund switches are allowed in a year?
Ulips certainly score over mutual funds when it comes to fund switching. After initially choosing a fund or funds at the time of buying a ULIP, you’re further allowed to switch / shift between different fund options any number of times you wish. However, there is a cap on the maximum numbers of fund switches allowed during a year free of cost. Beyond that, the policy holder has to pay a flat charge per switch. This is one of the closely guarded secrets of Ulips and is to be used over and over again. However, remember that it can also backfire if you are not careful because frequent switching amounts to timing the markets.
